Breaking

BofA's Countrywide Is Ordered to Pay $1.3B for Defective Loans
Tweet TWEET

Patrick Industries, Inc. Reports Second Quarter and Six Months 2013 Financial Results

Patrick Industries, Inc. Reports Second Quarter and Six Months 2013 Financial
                                   Results

PR Newswire

ELKHART, Ind., July 25, 2013

ELKHART, Ind., July 25, 2013 /PRNewswire/ --Patrick Industries, Inc. (NASDAQ:
PATK), a major manufacturer and distributor of building and component products
for the recreational vehicle ("RV"), manufactured housing ("MH") and
industrial markets, today reported its financial results for the second
quarter and six months ended June 30, 2013.

Second Quarter 2013 Financial Results

Net sales for the second quarter of 2013 increased $44.0 million or 38.0%, to
$159.6 million from $115.6 million in the same quarter of 2012. The increase
was primarily attributable to a 46% increase in the Company's revenue from the
RV industry, which represented approximately 73% of the Company's second
quarter 2013 sales. Sales to the MH industry increased 13%, while sales to
the industrial markets increased 33%. The Company estimates that RV industry
wholesale unit shipments increased approximately 14% in the second quarter of
2013 compared to the prior year. Additionally, the Company estimates that
wholesale unit shipments in the MH industry, which represented approximately
16% of second quarter 2013 sales, rose approximately 10% from the second
quarter of 2012. The industrial market sector, which is primarily tied to the
residential housing and commercial and retail fixtures markets, accounted for
11% of the Company's second quarter 2013 sales, and reflected an approximate
17% increase in new housing starts in the second quarter of 2013 compared to
the prior year. The Company estimates that approximately 60% of its
industrial market sales are linked to the residential housing sector and its
sales to the industrial markets generally lag new housing starts by
approximately six to nine months.

Excluding the revenue contributions of acquisitions completed in 2012, the
Company estimates its organic growth in the second quarter of 2013 at
approximately 20%, or $22.8 million of its total revenue increase. The
Company estimates that this organic growth was comprised of growth resulting
from market share gains of approximately 7% and growth tied to overall
industry improvement of approximately 13%. The remaining $21.2 million of the
revenue increase in the second quarter of 2013 was attributable to the
incremental contribution of the 2012 acquisitions (including related market
share and industry growth), resulting in incremental growth of approximately
18%.

Todd Cleveland, President and Chief Executive Officer, said, "We are pleased
with our second quarter revenue growth as well as the energy and momentum in
our end markets, especially in the RV industry, as evidenced by the solid
shipment levels during the first half of the year as well as OEM and dealer
sentiment. We believe the dedication of our team members and our focus on
delivering value to our customer base, in combination with the acquisitions we
have completed over the past several years, will continue to provide positive
contributions to our operating profitability and afford us the opportunity to
gain additional penetration in the RV, MH and industrial markets. In
addition, we also saw the historical seasonal pickup in both the RV and MH
markets as measured by higher unit shipments compared to the first quarter of
2013."

Patrick reported operating income of $12.9 million in the second quarter of
2013, an increase of $5.3 million or 70.2%, from the $7.6 million reported in
the prior year. Second quarter 2013 reported net income was $7.6 million or
$0.70 per diluted share and included the impact of an income tax provision of
$4.8 million or $0.45 per diluted share. As previously reported, Patrick
began to record income taxes at an estimated effective tax rate of 39% in the
first quarter of 2013. For the second quarter of 2012, the Company reported
net income of $13.3 million or $1.22 per diluted share, including the positive
impact of a non-cash income tax credit of $6.7 million or $0.61 per diluted
share related to the reversal of a portion of the tax valuation allowance
against its deferred tax assets.

Second quarter 2013 net income included an after-tax gain on sale of fixed
assets of $0.3 million or $0.02 per diluted share, related to the sale of a
facility in Halstead, Kansas, while second quarter 2012 net income included a
non-cash charge of $0.1 million or $0.01 per diluted share related to
mark-to-market accounting for common stock warrants. Exclusive of the gain on
sale of fixed assets, net income in the second quarter of 2013 would have been
$7.3 million or $0.68 per diluted share. Exclusive of the non-cash credit
related to the reversal of the tax valuation allowance and the non-cash charge
for stock warrant accounting, and assuming the same estimated effective tax
rate of 39% in the second quarter of 2012, net income in the second quarter of
2012 would have been $4.1 million or $0.38 per diluted share.

Six Months 2013 Financial Results

Net sales for the first six months of 2013 increased $83.4 million or 38.2%,
to $301.7 million from $218.3 million in the same period in 2012. For the
first six months of 2013, the Company's revenue from the RV industry, which
represented approximately 74% of its six months 2013 sales, increased by 48%.
The Company estimates that RV industry wholesale unit shipments increased
approximately 13% in the first six months of 2013 compared to the prior year.
Additionally, revenues from the MH industry, which represented 15% of the
Company's six months 2013 sales, rose 10% compared to the prior year as
wholesale unit shipments, as estimated by the Company, increased by
approximately 6%. Revenues from the industrial market increased 25% and
benefited from improved retail fixture and residential cabinet and furniture
sales. The industrial market, which accounted for 11% of the Company's six
months 2013 sales, saw new housing starts increase by approximately 24% for
the first six months of 2013 compared to the prior year.

Excluding the revenue contributions of the 2012 acquisitions, the Company
estimates its organic growth in the first six months of 2013 at approximately
18%, or $40.2 million of its total revenue increase. The Company estimates
that this organic growth was comprised of growth resulting from market share
gains of approximately 7% and growth tied to overall industry improvement of
approximately 11%. The remaining $43.2 million of the revenue increase in the
first six months of 2013 was attributable to the incremental contribution of
the 2012 acquisitions (including related market share and industry growth),
resulting in incremental growth of approximately 20%.

For the first six months of 2013, Patrick reported operating income of $23.3
million, an increase of $8.2 million or 54.4%, from the $15.1 million reported
in the first six months of 2012. Six months 2013 reported net income was
$13.6 million or $1.25 per diluted share and included the impact of an income
tax provision of $8.7 million or $0.80 per diluted share at an estimated
effective tax rate of 39%. For the first six months of 2012, the Company
reported net income of $18.3 million or $1.70 per diluted share, including the
positive impact of the non-cash income tax credit of $6.7 million or $0.62 per
diluted share related to the reversal of the tax valuation allowance against
its deferred tax assets discussed above.

Six months 2013 net income included the after-tax gain on sale of fixed assets
of $0.3 million or $0.02 per diluted share discussed above, while six months
2012 net income included a non-cash charge of $1.8 million or $0.17 per
diluted share related to stock warrant accounting. Exclusive of the gain on
sale of fixed assets, six months 2013 net income would have been $13.3 million
or $1.23 per diluted share. Exclusive of the non-cash credit related to the
reversal of the tax valuation allowance and the non-cash charge for stock
warrant accounting, and assuming the same estimated effective tax rate of 39%
in the first six months of 2012, six months 2012 net income would have been
$8.2 million or $0.76 per diluted share.

In February 2013, the Company's Board of Directors authorized a stock
repurchase program for the purchase of up to $10 million of the Company's
common stock from time to time through open market or private transactions
over the following 12 months. As of July 19, 2013, the Company had
repurchased 407,330 shares at an average price of $14.92 per share for a total
cost of approximately $6.1 million.

In 2011, as a result of the generation of taxable income, the Company began to
utilize its federal and state net operating loss carry forwards (the "NOLs")
of more than $29 million and $34 million, respectively, to offset taxable
earnings for federal and state tax purposes. At December 31, 2012, the
Company had gross federal NOLs remaining of approximately $9.8 million that it
fully utilized in the first six months of 2013. In addition, at December 31,
2012, the Company had gross state NOLs remaining of approximately $12.6
million, of which approximately $3.3 million were utilized in the first six
months of 2013. The ability to utilize these federal and state NOLs to offset
taxable earnings over the past several years significantly enhanced the
Company's cash flows generated from its operations.

"We are excited about our year to date revenue and operating performance in
addition to our strong cash flows, which have allowed us to continue to
strengthen our balance sheet, maintain appropriate debt and leverage
positions, and reinvest in our business through both capital expenditures and
acquisitions," stated Mr. Cleveland. "Our top priority is bringing the
highest level of quality products and services to our customers, which we
believe will in turn drive shareholder value. We intend to continue to pursue
acquisitions and other avenues to increase our top line and grow our operating
income, net income, cash flows, and earnings per share. We look forward to
the remainder of 2013 and 2014 in anticipation of steadily improving market
conditions in all three of the primary markets that we serve." Mr. Cleveland
further noted, "Our success as an organization is dependent on our team's
continued pursuit of the highest standards and performance levels and
exceptional customer service in every aspect of our business."

About Patrick Industries

Patrick Industries, Inc. (www.patrickind.com) is a major manufacturer of
component products and distributor of building products serving the
recreational vehicle, manufactured housing, kitchen cabinet, household
furniture, fixtures and commercial furnishings, marine, and other industrial
markets and operates coast-to-coast through locations in 11 states. Patrick's
major manufactured products include decorative vinyl and paper laminated
panels, countertops, wrapped profile mouldings, slide out trim and fascia,
cabinet doors and components, hardwood furniture, interior passage doors,
exterior graphics, and slotwall panels and components. The Company also
distributes drywall and drywall finishing products, electronics, wiring,
electrical and plumbing products, cement siding, interior passage doors,
roofing products, laminate and ceramic flooring, shower doors, furniture,
fireplaces and surrounds, interior and exterior lighting products, and other
miscellaneous products.

Forward-Looking Statements

This press release contains certain statements related to future results, or
states our intentions, beliefs and expectations or predictions for the future,
which are forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
involve a number of risks and uncertainties that could cause actual results to
differ materially from either historical or anticipated results depending on a
variety of factors. Potential factors that could impact results include: the
impact of any economic downturns especially in the residential housing market,
pricing pressures due to competition, costs and availability of raw materials,
availability of commercial credit, availability of retail and wholesale
financing for residential and manufactured homes, availability and costs of
labor, inventory levels of retailers and manufacturers, levels of repossessed
residential and manufactured homes, the financial condition of our customers,
retention and concentration of significant customers, the ability to generate
cash flow or obtain financing to fund growth, future growth rates in the
Company's core businesses, the ability to effectively manage the costs and the
implementation of the new enterprise resource management system, the
successful integration of acquisitions, stock price fluctuations, interest
rates, oil and gasoline prices, the outcome of litigation, adverse weather
conditions impacting retail sales, and our ability to remain in compliance
with our credit agreement covenants. In addition, national and regional
economic conditions and consumer confidence may affect the retail sale of
recreational vehicles and residential and manufactured homes. The Company
does not undertake to update forward-looking statements, except as required by
law. Further information regarding these and other risks, uncertainties and
factors is contained in the section entitled "Risk Factors" in the Company's
Annual Report on Form 10-K for the year ended December 31, 2012, and in the
Company's Form 10-Qs for subsequent quarterly periods, which are filed with
the Securities and Exchange Commission ("SEC") and are available on the SEC's
website at www.sec.gov.





 (thousands except per share data)                                     SECOND QUARTER    SIX MONTHS
                                                                          ENDED              ENDED
                                                                          June                         July 1,
 CONSOLIDATED STATEMENTS OF INCOME                                30,      July 1,   June 30,
 (Unaudited)                                                                       2012      2013      2012
                                                                          2013
 NET SALES                                                                $       $         $         $
                                                                          159,576  115,605  301,696  218,293
 Cost of goods sold                                                       134,416  97,766    254,100   184,020
  Gross profit                                                      25,160   17,839    47,596    34,273
 Operating expenses:
  Warehouse and delivery                                               4,710    3,981     9,246     7,655
  Selling, general and administrative                                  7,441    5,940     14,410    10,858
  Amortization of intangible assets                                    521      334       1,040     650
  Gain on sale of fixed assets                                         (426)    (3)       (430)     (3)
  Total operating expenses                                         12,246   10,252    24,266    19,160
 OPERATING INCOME                                                         12,914   7,587     23,330    15,113
  Stock warrants revaluation                                       -        134       -         1,804
  Interest expense, net                                            522      790       1,074     1,635
 Income before income taxes (credit)                                      12,392   6,663     22,256    11,674
  Income taxes (credit)                                            4,835    (6,650)   8,680     (6,650)
 NET INCOME                                                               $      $        $        $ 
                                                                          7,557   13,313    13,576    18,324
 BASIC NET INCOME PER COMMON SHARE                                        $     $      $      $   
                                                                          0.70    1.26      1.26      1.77
 DILUTED NET INCOME PER COMMON SHARE                                      $     $      $      $   
                                                                          0.70    1.22      1.25      1.70
 Weighted average shares outstanding – Basic                              10,720   10,526    10,814    10,373
 Diluted 10,762   10,921    10,856    10,758



(thousands)
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL  June 30,       Dec. 31,
POSITION
                                                2013           2012
                                                (Unaudited)
CURRENT ASSETS
 Cash and cash equivalents                     $    5,378  $     434
 Trade receivables, net                        31,963         17,858
 Inventories                                   51,674         46,992
 Deferred tax assets                           3,292          5,149
 Prepaid expenses and other                    2,473          3,237
 Total current assets                     94,780         73,670
Property, plant and equipment, net              37,589         37,069
Goodwill and other intangible assets, net       28,541         29,581
Deferred tax assets                             717            676
Deferred financing costs, net                   1,513          1,612
Other non-current assets                        828            861
 TOTAL ASSETS                              $ 163,968     $ 143,469
CURRENT LIABILITIES
 Accounts payable                              $  32,112    $  17,336
 Accrued liabilities                           11,780         11,816
 Total current liabilities                 43,892         29,152
Long-term debt                                  46,008         49,716
Deferred compensation and other                 3,026          3,193
 TOTAL LIABILITIES                         92,926         82,061
SHAREHOLDERS' EQUITY                            71,042         61,408
 TOTAL LIABILITIES AND SHAREHOLDERS'       $ 163,968     $ 143,469
EQUITY



SOURCE Patrick Industries, Inc.

Website: http://www.patrickind.com
Contact: Julie Ann Kotowski, Patrick Industries, Inc., 574-294-7511 /
kotowskj@patrickind.com